Virgin OneAccount - still a good choice?

"Phil Thompson" wrote

As I described earlier, simply keep the mortgage a/c at the *maximum* - you can't move any more out then!

It doesn't matter whether you have a balance of 80,000 on a mortgage of

100,000 & a current a/c of (say) 500, - or you have a balance of 100,000 on the mortgage & a current a/c balance of 20,500. Therefore, keep the latter (until you eventually decide to pay off the mortgage) and you should never need to transfer anything from the mortgage a/c to the current a/c.

All the major banks and building societys allow free cash withdrawal, AFAIK. You would have to be one of the stupid people who gets money out from a machine in M&S or your corner shop to get charged!

Like the earlier poster, I have NEVER been charged - and have had accounts with Barclays, HSBC, Natwest, Lloyds & Cahoot, ie Abbey National!

MC

Not really, the only ones I've ever encountered that charge are ones in petrol stations or similar places, which I havent used for that reason. Those I would expect would also charge Virgin as well, since they seem to operate on the basis that they add the fee onto your withdrawal as you make it.

fair enough, but the terms and conditions of the Woolwich Openplan Offset mortgage are clear:

"Cash withdrawals charges: Withdrawals in the UK using Woolwich, Barclays or LINK cash machines No charge Withdrawals in the UK using non-LINK cash machines displaying a VISA or PLUS logo only+ 1.5% of transaction (£1.50 min, no max) "

which would imply the need to pick a Link ATM to avoid routine charges (not the chargeable retail ATMs).

There are also charges for bank Giro credits etc, in other words this account does not seem to follow the "free personal banking" model we're familiar with.

Phil

agreed, my point was that if you change your mind or circumstances and do want to move it that's where the additional admin is involved.

Phil

"Phil Thompson" wrote

I see - you're complaining because the FD model allows you to either :- (1) use it *exactly* like the One account model (including the lack of "admin"); - OR - (2) move money between the current & mortgage accounts if you desire (which is a little admin).

Option (2) *not* being allowed by the One account.

In other words, you are complaining that FD has ***greater flexibility*** !! [After all, you *cannot* use option (2) with the One account and could easily *choose* not to use it with FD.]

I'm not complaining about anything, just trying to understand. If there is only one account then you obviously can't move things between them , so there is less flexibility in that sense, yes. I wouldn't see an account with twenty sub-divisions and the ability to spend time moving money between any and all of them as an advantage but it would indeed be more flexible :-)

I guess I don't see the point of having two accounts in the FD system when they effectively run as one. It can create a need to move money where there need have been none.

So I could open a FD flexible mortgage for £100k with zero debt in the mortgage account, -£100k in the curent account and run it the same as a One account, if I have followed you correctly.

Phil

"Phil Thompson" wrote

It *is* an advantage, *if* that is what you want to do. But it is also *not* a dis-advantage, if you don't want to do it!

The point is that you don't *need* to with FD - even though you *can*. With the One account, you *can't*.

[You appeared to say that the One account model was better because of this - I'd just say it's no worse, simply don't bother using the extra flexibility with FD if you don't want to!]

"Phil Thompson" wrote

How so? In what situation do you believe that you would *need* to move money using the FD model??

"Phil Thompson" wrote

Nope - run it with 100K debt in the mortgage a/c (always) - and loads of dosh in the current account (you'd need an overdraft limit of at least 100K to use your method). The total of the two accounts would always add up to the same as the one balance in a One account.

start with £100k debt in mortgage account, zero in current account. Sometime later the "mortgage payments" have reduced balance of mortgage account to £80k of debt, have £3k in current account. Want to buy car for £18k Need to move £15k or more into current account.

or can I just overdraw c/a up to £20k in this instance with FD ie keeping total debt £80k + £20k overdraft same as original £100k (I've looked at these products till they become a blur)

Phil

"Phil Thompson" wrote

One last try to explain it to you :-

Leave the mortgage a/c at 100K *constantly*. Don't make *any* "mortgage payments" (apart from the interest payments being taken from current a/c of course).

In your example above you'd end up with 100K debt (still) in mortgage a/c, but 23K now in current a/c. Simply buy the car from those funds (already) in the current a/c. Comprendez??!

this was the missing link. I hadn't realised this was an option. Do you have to "declare" this by saying its "interest only" or do FD never transfer capital from current a/c to mortgage a'c leaving that entirely up to you ?

for clarification, are you allowed to overdraw the current account ? your method is based on keeping it in credit and not transferring money to the mortgage, is this because overdrafts are not permitted or have to be pre-arranged ?

Phil

"Phil Thompson" wrote

As I said before, there are various choices! When you first set it up, FD will ask you, - firstly whether you want interest to be taken from a current a/c or charged to your mortgage a/c, and - secondly whether you want to set up a standing order from current a/c to mortgage a/c.

Simply say "current a/c" & "no thanks" !

[You can always set up a S/O later whenever you want to, or send one-off amounts to the mortgage a/c at any time.]

"Phil Thompson" wrote

Overdrafts *are* permitted, but (of course) do need to be pre-arranged (you can arrange it when you take the mortgage, or even arrange an "Offset Loan" as well!).

With the 'One account', can you have an "overdraft" **in excess** of the pre-arranged "mortgage limit" ?? Don't forget - any overdraft on the FD current a/c *increases* the total borrowing you are allowed, to be more than the "initial mortgage amount" - and the overdraft interest rate is the same as the mortgage rate.

Tim,

May I interrupt here (a little late). As the original poster, I've had my query answered (I think - for the record, I'm going with OneAccount) but I've kept myself entertained by attempting to follow the ongoing discussion. I must admit that most of it has gone way over my head (I'm at the level of Dickens, with his statement about "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness ..." etc.), but I can't understand your above response to Phil's posting - surely Option 2 is not relevant for the OneAccount.?

Look; I'm going for a drink with my mates on Saturday - I'm going to tell them I'll soon be shifting my C&G "Gold" (hah!) account savings to an account that will earn me 5.85% *tax free* (effectively) - prove me wrong!

"Nick Michell" wrote

Yes?

"Nick Michell" wrote

Oh go on then...

"Nick Michell" wrote

Exactly. That was my point. FD allows (1) OR (2) -- but OneAccount only allows (1) - making FD more flexible.

"Nick Michell" wrote

Do you think that anything I've said goes against that idea?

I knew I shouldn't have got involved in this! Just that all this faffing around with many accounts is what I'm trying to avoid, so OneAccount seems ideal for me. I'll go back to my sandpit. Thanks again.